Fed Officials: Rate-Hike Tack Will Be Flexible

Use of Alternative Tools Won't Augur Permanent Policy Shift

By

Michael S. Derby

May 20, 2014 7:16 p.m. ET

Two Federal Reserve officials are making the case that the novel tools likely to be employed to push short-term interest rates higher don't necessarily augur a permanent policy-making overhaul, shedding light on the debate going on within the central bank.

New York Fed chief William Dudley and San Francisco Fed chief John Williams said this week that the new tools—including so-called reverse repos and interest paid on excess...